Iraq rules out special pricing of crude oil for India

Iraq, the second-largest supplier of oil to India, has ruled out offering any special price to the country because its laws don't allow it to do so.

Iraq, the second-largest supplier of oil to India, has ruled out offering any special price to the country because its laws don't allow it to do so.

"Our laws do not allow us to offer any special pricing to anyone. We can sell crude only at the existing market- determined prices," Iraqi deputy prime minister for energy Hussain Ibrahim Saleh al-Shahristani said in Mumbai on Wednesday night.

India imports about 20 million tonnes of crude oil from Iraq annually and the government is keen to increase this to meet demand from new refineries. Iraq is the second-largest oil supplier to the country, after Saudi Arabia.

Shahristani was responding to a query on whether his country could offer discounts to India - considering the old ties between the two countries - as Iraq seeks to increase crude supplies to the country and woos investments in the oil and petrochem sectors.

He was delivering the Oberoi Lecture series organised by the Oberoi hotel group and the International Institute for Strategic Studies on recent trends in the global energy, oil and gas economy in Mumbai on Wednesday night.

Noting that India's oil demand will rise 4-5% annually, Shahristani offered uninterrupted oil supplies and also sought increased investments into his country, which needs $500 billion to improve infrastructure after the war-time destruction.

"India can count on Iraq as a dependable, long-term supplier of its crude oil needs," he said.

"Your oil imports are expected to reach 6.8 million barrels per day by 2035 from around 2.5 mpbd now. Where should India look for its oil needs? Iraq will be the main source of growth for the global oil supply over the next decade or two," he said.

"India's dependence on oil imports will rise from 74% in 2012 to a whopping 92% over the next two decades, which requires special attention to be given to the issue of security of supply."

Shahristani also said Iraq is keen on joint investments in the oil sector in the country and had already evinced interest in the near-complete 15 million tonne oil refinery being set up by Indian Oil at Paradip.